Second Circuit Might Reconsider Forum Non Conveniens And Foreign Arbitration Awards

• Published date: 09 December 2022
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Steptoe & Johnson
• Author: Mr Steven Davidson, Michael Baratz, Molly Bruder Fox and Sonja Arndt-Johnson

First Tuesday Update is our monthly take on current issues in commercial disputes, international arbitration, and judgment enforcement. This month we cover a case pending before the United States Court of Appeals for the Second Circuit involving the New York Convention and the doctrine of forum non conveniens, which allows a court to dismiss a case if it finds another forum is more appropriate. In Olin Holdings Limited v. Libya, Case No. 22-825, the State of Libya is appealing an order from the Southern District of New York (SDNY) confirming a foreign arbitral award in favor of Olin, a Cyprus-based company. Libya is appealing on the basis that it contends it did not waive sovereign immunity and did not consent to arbitrate. Libya is also contending the district court erred in denying its forum non conveniens motion. This update focuses on the forum non conveniens doctrine. Olin has argued that if the Second Circuit is inclined to consider forum non conveniens, it should overrule two of its prior decisions allowing dismissals on that basis, asserting that the doctrine has no application as it relates to foreign arbitral awards. This case could potentially represent an examination of forum non conveniens as it relates to the recognition of foreign arbitral awards, which the Second Circuit has not reconsidered in 25 years.

On March 23, 2022, in Olin Holdings Limited v. State of Libya' Case No. 1:21-cv-04150-JGK (S.D.N.Y.), the district court granted Olin's Petition to Confirm Foreign Arbitral Award, and denied Libya's Motion to Dismiss under the forum non conveniens doctrine. The district court found clear evidence that Libya agreed to arbitrate with Olin in its original Treaty. Dkt. No. 25 at 17. Furthermore, the district court confirmed the Award, finding that the Tribunal's 143-page Award was "thoughtful. . . fair and reasonable" and that Libya did not meet its burden when requesting the case be dismissed under the forum non conveniens. Id. at 17, 26. When finding Libya did not meet its burden, the district court held that the private interest factors (there were no difficulties associated with conducting discovery or trial aboard) and the public interest factors (summary proceedings only contributed mildly to court congestion and posed no burden on the local community in connection with the jury trial) did not weigh in favor of having the case dismissed. Id. at 26. The Final Judgment directed Libya to pay Olin over $27 million, including interest. Dkt...